c6 -ethics_and_government_compatibility_mode_
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GLOBALIZATION, GLOBALIZATION, GLOBALIZATION, GLOBALIZATION,
GOVERNMENT GOVERNMENT GOVERNMENT GOVERNMENT
RELATION, AND RELATION, AND RELATION, AND RELATION, AND RELATION, AND RELATION, AND RELATION, AND RELATION, AND
ETHICAL ISSUES IN ETHICAL ISSUES IN ETHICAL ISSUES IN ETHICAL ISSUES IN
BUSINESSBUSINESSBUSINESSBUSINESS
TOPIC OUTCOMES
At the end of this chapter, students should be At the end of this chapter, students should be At the end of this chapter, students should be At the end of this chapter, students should be
able to:able to:able to:able to:
Explain the impact of globalization over Explain the impact of globalization over Explain the impact of globalization over Explain the impact of globalization over
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�Explain the impact of globalization over Explain the impact of globalization over Explain the impact of globalization over Explain the impact of globalization over
businesses.businesses.businesses.businesses.
�Explain the relationship between Explain the relationship between Explain the relationship between Explain the relationship between
government regulation and business government regulation and business government regulation and business government regulation and business
practices & ethical conduct of businesses.practices & ethical conduct of businesses.practices & ethical conduct of businesses.practices & ethical conduct of businesses.
GLOBALIZATION IN TODAY'S BUSINESSGLOBALIZATION IN TODAY'S BUSINESSGLOBALIZATION IN TODAY'S BUSINESSGLOBALIZATION IN TODAY'S BUSINESS
� GlobalizationGlobalizationGlobalizationGlobalization refers to the increasingmovement of goods, services, and capitalacross national borders.
� Transnational and multinational companies exceed borders, making everything from product conception, design, manufacturing to product conception, design, manufacturing to assembly truly international.
� Think of an iPod. It was designed in the USA, its parts were produced in Taiwan, the Ukraine, Thailand, it is assembled in China and is shipped into the world. The label shouldn't read "Made in China", but "Made in the World". Globalization
FACTORS THAT DRIVES GLOBALIZATIONFACTORS THAT DRIVES GLOBALIZATIONFACTORS THAT DRIVES GLOBALIZATIONFACTORS THAT DRIVES GLOBALIZATION
1.1.1.1. TechnologicalTechnologicalTechnologicalTechnological innovationinnovationinnovationinnovation –––– internet,,,, sophisticated software,fiber optics, wireless, and satellite technology, amongothers, have made it easier and faster for companies tocommunicate with employees, partners, suppliers, andcustomers all over the globe in real time.
2.2.2.2. TransportationTransportationTransportationTransportation systemsystemsystemsystem –––– improvement in transportation,from air freight to ocean vessels, enable fast and cheapmovement of goods and services from one place tomovement of goods and services from one place toanother.
3.3.3.3. TheTheTheThe riseriseriserise ofofofof majormajormajormajor transnationaltransnationaltransnationaltransnational companiescompaniescompaniescompanies –––– big, well-capitalized firms are better equipped to conduct businessacross national borders than smaller, local companies.
4.4.4.4. SocialSocialSocialSocial andandandand politicalpoliticalpoliticalpolitical reformsreformsreformsreforms –––– critical has made productsand services accessible to the entire computerized world,creating a wish to buy things irrespective of where they areproduced. E.g. When China opens its economy, thisaccelerate globalization process.
HOW GLOBALIZATION AFFECT BUSINESS?HOW GLOBALIZATION AFFECT BUSINESS?HOW GLOBALIZATION AFFECT BUSINESS?HOW GLOBALIZATION AFFECT BUSINESS?
� Multi national companies (MNCs) need todeal with government in variouscountries, thus prune to ethical businessconduct.
� Corporations and individuals, especially� Corporations and individuals, especiallycorporations doing business globally, mustunderstand and evaluate the cultures ofthe people with which it wishes to dobusiness in order to ensure smoothtransactions and negotiations.
HOW BUSINESS & GOVERNMENT RELATE?HOW BUSINESS & GOVERNMENT RELATE?HOW BUSINESS & GOVERNMENT RELATE?HOW BUSINESS & GOVERNMENT RELATE?
� Governments create the rules &
frameworks in which businesses are able to
compete against each other. From time to
time the government will change these
rules and frameworks forcing businesses to rules and frameworks forcing businesses to
change the way they operate.
� Business is thus keenly affected by
government policy. Key areas of
government policy that affect business are:
HOW BUSINESS & GOVERNMENT RELATE? (CONT.)HOW BUSINESS & GOVERNMENT RELATE? (CONT.)HOW BUSINESS & GOVERNMENT RELATE? (CONT.)HOW BUSINESS & GOVERNMENT RELATE? (CONT.)
1.1.1.1. Economic policies Economic policies Economic policies Economic policies – Government interferes the
country’s economy for reason to rectify economic
cycle. But some had triggered issues such as:
� E.g. some claimed that privatisation of government
agencies or institutions made workers lost their agencies or institutions made workers lost their
pensions.
� E.g. according to a statement made by a Public
Works Minister, the NSE was built for a projected use
of 160,000 vehicles per day, but is now being used
by 1,200,000 vehicles per day.
HOW BUSINESS & GOVERNMENT RELATE? (CONT.)HOW BUSINESS & GOVERNMENT RELATE? (CONT.)HOW BUSINESS & GOVERNMENT RELATE? (CONT.)HOW BUSINESS & GOVERNMENT RELATE? (CONT.)
2.2.2.2. Legal changes Legal changes Legal changes Legal changes – Government changes the laws regularly in
line with its political policies. As a result, businesses are
continually having to respond to changes in the legal
framework:
� E.g. The requirement for businesses to cater for disabled
people, by building ramps into offices, shops etc.people, by building ramps into offices, shops etc.
� E.g. Creating tighter antiantiantianti----competition law competition law competition law competition law on what
constitutes fair competition between businesses. [Further
reading material: Competition policies in Malaysia]
� E.g. Imposing requirements to reduce “glass ceiling”“glass ceiling”“glass ceiling”“glass ceiling” for
women and preventing sexual harassment at workplace.
ISSUE 1: BRIBE VS. GREASE PAYMENTISSUE 1: BRIBE VS. GREASE PAYMENTISSUE 1: BRIBE VS. GREASE PAYMENTISSUE 1: BRIBE VS. GREASE PAYMENT
Grease PaymentsGrease Payments
Relatively small sums of money given for the purpose of getting minor officials to:Relatively small sums of money given for the purpose of getting minor officials to:
• Do what they are supposed to be doing• Do what they are supposed to be doing faster• Do what they are supposed to be doing better
BribesBribes
Relatively large amounts of money given for the purpose of influencing officials to make decisions or take actions that they otherwise might nottake. If the officials considered the merits of the situation only, they might take some other action.
Relatively large amounts of money given for the purpose of influencing officials to make decisions or take actions that they otherwise might nottake. If the officials considered the merits of the situation only, they might take some other action.
Is “greasing” similar to “bribery”?Is “greasing” similar to “bribery”?Is “greasing” similar to “bribery”?Is “greasing” similar to “bribery”? Anti-Corruption Video
ISSUE 2: ENFORCEMENT OF JAKIM HALAL ISSUE 2: ENFORCEMENT OF JAKIM HALAL ISSUE 2: ENFORCEMENT OF JAKIM HALAL ISSUE 2: ENFORCEMENT OF JAKIM HALAL
LOGO W.E.F. 1LOGO W.E.F. 1LOGO W.E.F. 1LOGO W.E.F. 1STSTSTST JAN 2012JAN 2012JAN 2012JAN 2012
Can the Malaysian government makes it Can the Malaysian government makes it Can the Malaysian government makes it Can the Malaysian government makes it
compulsory for all companies claiming compulsory for all companies claiming compulsory for all companies claiming compulsory for all companies claiming
selling selling selling selling halalhalalhalalhalal product to display no other product to display no other product to display no other product to display no other selling selling selling selling halalhalalhalalhalal product to display no other product to display no other product to display no other product to display no other
than JAKIM certified HALAL Logo? Will this than JAKIM certified HALAL Logo? Will this than JAKIM certified HALAL Logo? Will this than JAKIM certified HALAL Logo? Will this
new requirement be construed as against new requirement be construed as against new requirement be construed as against new requirement be construed as against
the individual rights as what had been the individual rights as what had been the individual rights as what had been the individual rights as what had been
promoted by the Western countries?promoted by the Western countries?promoted by the Western countries?promoted by the Western countries?
ISSUE 3: THE SHARE SWAPPING BETWEEN ISSUE 3: THE SHARE SWAPPING BETWEEN ISSUE 3: THE SHARE SWAPPING BETWEEN ISSUE 3: THE SHARE SWAPPING BETWEEN
MAS AND AIR ASIAMAS AND AIR ASIAMAS AND AIR ASIAMAS AND AIR ASIA
1.1.1.1. List down the affected stakeholders.List down the affected stakeholders.List down the affected stakeholders.List down the affected stakeholders.
2.2.2.2. Has the Malaysia government made Has the Malaysia government made Has the Malaysia government made Has the Malaysia government made
the right decision when instructing the right decision when instructing the right decision when instructing the right decision when instructing
MAS to swap shares with Air Asia since MAS to swap shares with Air Asia since MAS to swap shares with Air Asia since MAS to swap shares with Air Asia since MAS to swap shares with Air Asia since MAS to swap shares with Air Asia since MAS to swap shares with Air Asia since MAS to swap shares with Air Asia since
many parties claiming that it was a many parties claiming that it was a many parties claiming that it was a many parties claiming that it was a
“win“win“win“win----lose” business dealing?lose” business dealing?lose” business dealing?lose” business dealing?
3.3.3.3. If you were the owner of MAS, what will If you were the owner of MAS, what will If you were the owner of MAS, what will If you were the owner of MAS, what will
be your decision then i.e. how will you be your decision then i.e. how will you be your decision then i.e. how will you be your decision then i.e. how will you
rectify the current situation?rectify the current situation?rectify the current situation?rectify the current situation?
ISSUE 4: THE SETTING UP OF LYNAS PLANT AT ISSUE 4: THE SETTING UP OF LYNAS PLANT AT ISSUE 4: THE SETTING UP OF LYNAS PLANT AT ISSUE 4: THE SETTING UP OF LYNAS PLANT AT
GEBENG, PAHANG.GEBENG, PAHANG.GEBENG, PAHANG.GEBENG, PAHANG.
Whose voices has more “right to be heard” Whose voices has more “right to be heard” Whose voices has more “right to be heard” Whose voices has more “right to be heard” Whose voices has more “right to be heard” Whose voices has more “right to be heard” Whose voices has more “right to be heard” Whose voices has more “right to be heard”
over the issue over the issue over the issue over the issue –––– politicians or the residents politicians or the residents politicians or the residents politicians or the residents
nearby nearby nearby nearby GebengGebengGebengGebeng areas? Why? areas? Why? areas? Why? areas? Why?
CONCLUSIONCONCLUSIONCONCLUSIONCONCLUSIONIt is inevitably for government to regulate It is inevitably for government to regulate It is inevitably for government to regulate It is inevitably for government to regulate
laws to control unethical or unlawful laws to control unethical or unlawful laws to control unethical or unlawful laws to control unethical or unlawful
business activities. But, as the laws is business activities. But, as the laws is business activities. But, as the laws is business activities. But, as the laws is
made by human being, there are certainly made by human being, there are certainly made by human being, there are certainly made by human being, there are certainly
few loopholes being manipulated by few loopholes being manipulated by few loopholes being manipulated by few loopholes being manipulated by few loopholes being manipulated by few loopholes being manipulated by few loopholes being manipulated by few loopholes being manipulated by
certain parties for personal interest. To certain parties for personal interest. To certain parties for personal interest. To certain parties for personal interest. To
overcome this risk, organization and its overcome this risk, organization and its overcome this risk, organization and its overcome this risk, organization and its
corporate people should create our own corporate people should create our own corporate people should create our own corporate people should create our own
method as “check and balance” method as “check and balance” method as “check and balance” method as “check and balance”
mechanism to ensure that we run our mechanism to ensure that we run our mechanism to ensure that we run our mechanism to ensure that we run our
business ethically.business ethically.business ethically.business ethically.
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